Pakistan is exploring the introduction of a carbon levy in its 2025-26 budget, with discussions set to take place during an upcoming visit by the International Monetary Fund (IMF), according to sources.
An IMF delegation is scheduled to arrive in Pakistan on February 28, following preliminary technical discussions with federal and provincial officials from February 24 to 28. The agenda includes green budgeting, climate-related expenditures, and the proposed carbon levy.
The IMF team is also expected to present recommendations on expanding green budgeting in Pakistan’s fiscal framework. The government hopes to secure a concessional loan package valued between $1 billion and $1.5 billion, contingent on the outcome of negotiations with the lender.